Financial Vulnerability Isn’t Always Obvious

The conversations coming out of the Vulnerability Registration Service 2026 conference reinforced just how important vulnerability assessments have become for firms operating under Consumer Duty. We asked Craig Jenkins, Head of Professional Services, to share his perspective on where the industry is heading and how leading lenders are using behavioural insights to better understand customer circumstances and potential signs of vulnerability.

Consumer Duty has definitely changed the conversation around vulnerability across the lending industry. Before it came into place, a lot of vulnerability assessments within financial services were reactive. Customers would often self-report issues or place themselves on a vulnerability register, but naturally that only captures the people willing or able to disclose their circumstances in the first place.

The reality is financial vulnerability is not always obvious, and it is not always permanent either. It can be behavioural, situational, or triggered by a major life event, which means lenders are increasingly expected to look beyond basic affordability checks and build a more complete picture of a borrower’s financial circumstances before offering credit.

This is where behavioural insights and Open Banking become incredibly useful. More lenders are beginning to look at patterns in customer behaviour rather than relying solely on static affordability data. With access to transaction data, descriptions, dates and amounts, firms can start using customer spending behaviour to build a more holistic view of a borrower’s financial circumstances.

Gambling is probably one of the clearest examples. If someone’s gambling outgoings are consistently increasing while their returns are dropping month-on-month, that could be an early indicator of gambling addiction and a potential sign of vulnerability. Or, at the very least, someone who’s unfortunately not having a great run of luck.

Other indicators can be more situational: 

• A sudden influx of money
• Changes in pension income
• Unusual transaction patterns

could point towards a major life event such as bereavement.

Now, we’re not saying by any stretch of the imagination that these things are 100 percent proof of vulnerability on their own. The goal isn’t to create blanket assumptions about customers, it’s to give lenders a more informed understanding of the person behind the application so they can make better decisions and offer support where it’s needed.

The firms doing this well are balancing regulatory expectations with commercial reality, using better customer insight to strengthen decision-making, reduce avoidable risk, and improve customer experience.

Ultimately, a better understanding of the customers leads to better outcomes for everyone involved.

Consumer Duty has clearly accelerated the industry’s focus on vulnerability, but all things considered, this is really about building a better understanding of customers and the circumstances behind their credit applications.